Canada's debt

[Smallc]

John McCallum supports spending review but does not think any program cuts should be made during economic downturns.

He's right. First, he should know what he's talking about given who he is, and second, you don't cut duringa recession. Where the recession is over...then we can cut...and I have a feeling we will have to...in the tens of billions. It may be like the 90s again, where no department is spared.

[Martin Chriton]

He's right. First, he should know what he's talking about given who he is, and second, you don't cut duringa recession. Where the recession is over...then we can cut...and I have a feeling we will have to...in the tens of billions. It may be like the 90s again, where no department is spared.

Just because you're in a recession doesn't mean you have to manage your money unwisely. You can reallocate money to more effective programs.

[Smallc]

Just because you're in a recession doesn't mean you have to manage your money unwisely. You can reallocate money to more effective programs.

You can, but since the idea is to save jobs right now, cuts to programs that result in people losing their jobs aren't good.

[capricorn]

They have? When? Where?

smallc, I stand corrected. In fact, the Conservatives did cut $1B in spending in September 2006.

The Conservative government finished its review of federal government spending and on September 25, 2006 announced $1 billion worth of savings over two years by cutting programs and activities it feels are not effective.

A total of 66 programs have been chopped altogether or pared down in many government departments and agencies.

http://canadaonline.about.com/od/governmen...ndingcuts06.htm

[capricorn]

He's right.

I never said he wasn't.

[Smallc]

That's good, and it's actually something I didn't know about. I stand corrected...but you do have to admit, they haven't tried very hard.

[benny]

That's good, and it's actually something I didn't know about. I stand corrected...but you do have to admit, they haven't tried very hard.

If the opposition dares saying to the Conservatives "you have not tried very much to cut spending", they will laugh their way towards another elections victory.

[Oleg Bach]

First time in years that I viewed question period ----all I can say is - boy the quality sure has gone down....and the other thing I can say with confidence - no matter what party is in - we ARE DOOMED.....What ever happened to people with brains,breeding and character entering politics? It seems that no one wants the job other than the losers. Oh and that lady that left the documents at the broadcaster and blamed the apprentice -----that thing on her lower right jaw - YAH - that big growth ----for God's sake chop that thing off - get a plastic surgeon woman - you don't need an extra little head growing on your chin.....shhhhhhheeeeeesh - two stitches and it gone..reminds me of the type of person with the growth on the end of the nose with the six inch black hair growing out ----dumb..presentation is everything! And what's with half of parliment looking like elves?

[benny]

First time in years that I viewed question period ----all I can say is - boy the quality sure has gone down....and the other thing I can say with confidence - no matter what party is in - we ARE DOOMED.....What ever happened to people with brains,breeding and character entering politics? It seems that no one wants the job other than the losers. Oh and that lady that left the documents at the broadcaster and blamed the apprentice -----that thing on her lower right jaw - YAH - that big growth ----for God's sake chop that thing off - get a plastic surgeon woman - you don't need an extra little head growing on your chin.....shhhhhhheeeeeesh - two stitches and it gone..reminds me of the type of person with the growth on the end of the nose with the six inch black hair growing out ----dumb..presentation is everything! And what's with half of parliment looking like elves?

What about the topic (the debt) for a change!?

[Martin Chriton]

You can, but since the idea is to save jobs right now, cuts to programs that result in people losing their jobs aren't good.

Hah. And you wonder why the Conservatives can't make cuts? Almost any cut they could make would result in a least someone losing there job.

If you cut Y jobs and create X (where X>Y) is that a bad decision?

[Smallc]

That's why we should wait.

[benny]

Hah. And you wonder why the Conservatives can't make cuts? Almost any cut they could make would result in a least someone losing there job.

If you cut Y jobs and create X (where X>Y) is that a bad decision?

Jobs creation/preservation is fast becoming only a purely political goal since GDP growth is fast becoming disconnected/uncorrelated from employment numbers.

[Machjo]

He's right. First, he should know what he's talking about given who he is, and second, you don't cut duringa recession. Where the recession is over...then we can cut...and I have a feeling we will have to...in the tens of billions. It may be like the 90s again, where no department is spared.

Not necessarily. It is possible to cut during a recession while still making money ore available in the economy.

To take an example, let's say the government decides to reduce spending in all sorts of areas. Granted this will cause much unemployment in the public sector, and in the case of a severe enough recession, likely push us towards deflation. One way to fight the deflation is to lower interest rates. In extreme cases, they could even be lowered to zero percent.

If that is not enough to stop deflation, then the Bank of Canada also has the power to print money. I understand that printing money and locking it p in a vault is no more useful than not printing it at all. So if we're reducing government spending, then how do we put this newly printed money into circulation? I can see two possibilities:

1. As long as we have a federal debt, we can use this newly printed money, along with the money saved from the spending cuts, to pay off the debt. This money is given to the investors, who are then free to spend it as tey wish, thus creating jobs with that money in other ways.

2. Invest in ethical funds. These funds would be used to buy stocks in ethical companies, which would help to provide funds to ethical companies that need them by simply selling thei shares to the government.

Other solusions might exist, but these are some.

To counteract the inflationary dangers of printing more money after the recession, the government could then have two additional options:

1. Ensure revenue surpasses spending, thus allowing government to take money out of the economy. With the debt having been paid off during the recession even if with printed money, this would be a way to take that money back out of circulation as soon as the recession ends and the fear of inflation arrives.

2. Any money invested in ethical mutual funds during the recession could then be sold, with the money taken out of circulation.

These options coud be a way of killing two birds with one stone, putting money into the economy in recession while still keeping control of it so as to be able to take it back out of the economy afterwards.

[Machjo]

The deficit keeps getting bigger. Taxes were cut too fast....and now we'll have to cut spending again to get out.

We certainly should not be cutting taxes while we have a federal debt.

[Machjo]

You can, but since the idea is to save jobs right now, cuts to programs that result in people losing their jobs aren't good.

I don't think the government should ever try to 'save jobs'. Instead, it should be responsible for maintaining a balanced rate of employment. This does not guarantee that any specific job will continue to exist (had we adopted and maintained such a policy since last century pwe'd still be building the model T), but simply employment will be available, even if it does mean replacing one opportunity with another.

This also means that we will need funding for retraining of laid off workers. One possible way to do that would be to make more of our tax-dollars charity-deductible so that organizations can have access to more funding to help unempoyed workers. In the worst-case scenario, it might even be necessary to increase the overall tax rate to do so.

[benny]

We certainly should not be cutting taxes while we have a federal debt.

The problem is simply that these "we" don't exist since the population doesn't elect political parties who don't promise tax cuts.

[Machjo]

First time in years that I viewed question period ----all I can say is - boy the quality sure has gone down....and the other thing I can say with confidence - no matter what party is in - we ARE DOOMED.....What ever happened to people with brains,breeding and character entering politics? It seems that no one wants the job other than the losers. Oh and that lady that left the documents at the broadcaster and blamed the apprentice -----that thing on her lower right jaw - YAH - that big growth ----for God's sake chop that thing off - get a plastic surgeon woman - you don't need an extra little head growing on your chin.....shhhhhhheeeeeesh - two stitches and it gone..reminds me of the type of person with the growth on the end of the nose with the six inch black hair growing out ----dumb..presentation is everything! And what's with half of parliment looking like elves?

I don;t care so much about the superficial appearance of an MP, but the content of his character.

[Machjo]

The problem is simply that these "we" don't exist since the population doesn't elect political parties who don't promise tax cuts.

Then we need an MP who will stand up to his local community and try to educate it. Certainly, tax cuts, or at least making more direct taxes charity deductible, does have the advantage of making more funds accessible to charitable organizations to help the needy, and so I'm all for them... once the debt is balanced.

[benny]

The growth of a national debt should also be evaluated relatively to the growth rate of the national population.

[Machjo]

Also, going back to making more money available to fight the recession, we culd make an analogy to a fisherman. He doesn't take the bait into his hand and just thorw it out into the water to never be seen again. He hooks it to the end of a line so that once the fish bite, he can reel it in again.

If we look at all the government spending now, especially with the bail outs, that money the government no longer has. It may help to create or save some jobs now, but what happens after the recession is over and inflation kicks it? Had the government just put all that money into wise investments, it could still stimulate the economy, but it would have the advantage that after the recession, the government coud reel that money back in to fight inflation, thus kiling two birds with one stone. Right now, it seems that the govenment is trying to fight the recession but isn't preparing to fight the oncoming inflation. A good govenrment woudl try to fight both simultaneously by planning ahead.

[Machjo]

The growth of a national debt should also be evaluated relatively to the growth rate of the national population.

We should always aim to be debt-free. A national debt should only occur in the event of a national emergency. If we're indebted when it uccurs, then we'll be adding debt to debt. If we are debt-free at the beginning, then the government could borrow considerably and easily in the event of a national emeency.

Right now we're in a recession, but this can be dealt with calmly through low interest rates and possibly, worse case scenario, printing and wise investment of government money. We are not now in an emergency situation, and the government need not crete make-work jobs.

[benny]

Then we need an MP who will stand up to his local community and try to educate it. Certainly, tax cuts, or at least making more direct taxes charity deductible, does have the advantage of making more funds accessible to charitable organizations to help the needy, and so I'm all for them... once the debt is balanced.

I think deductions for charity contributions are perverting the charitable spirit. How about showing directly a spirit of self-sacrifice?

[Machjo]

I think deductions for charity contributions are perverting the charitable spirit. How about showing directly a spirit of self-sacrifice?

As I'd mentioned above, I'd rather just tax-cuts. I give of my time and money already, but with tax cuts, I could give even more. Recognizing though that some might fear that the more vulnerable could suffer from such tax cuts, I'd be willing to compromise on just making more money charity deductible.

I used to be a hard-core socialist until I'd seen first hand, ironcially enough when I came to need help myself at one point in my life, just how inefficient, bureaucratic, and incompetent government help is. In the end, I got more help from a friend than from the government. Once I'd gone back to work, I was not as enthusiastic about paying my taxes to such a system as I was before. Before that, though I did give to charity, I was quite satisfied with how my taxes were being spent (while I was paying my taxes in ignorant bliss). Now that I've seen how that money is realy spent, I'd rather it go to a charity of my choice, which I know to be more competent than the govenrment. The problem of course is that they tend to be more limited in their funding partially due to high taxes.

I can understand what you're saying there, and that leaves me in two minds about charitable tax deductions. I'm not sure myself if I support the idea I'd presented above, but offered it as a brainstorm anyway. I'm certainly open to ideas of course.

[benny]

We should always aim to be debt-free. A national debt should only occur in the event of a national emergency. If we're indebted when it uccurs, then we'll be adding debt to debt. If we are debt-free at the beginning, then the government could borrow considerably and easily in the event of a national emeency.

Right now we're in a recession, but this can be dealt with calmly through low interest rates and possibly, worse case scenario, printing and wise investment of government money. We are not now in an emergency situation, and the government need not crete make-work jobs.

Again, your "we" doesn't exist to counter-act capitalism who enslaves governments through indebtedness and who enslaves populations by creating jobs.

[Machjo]

Again, your "we" doesn't exist to counter-act capitalism who enslaves governments through indebtedness and who enslaves populations by creating jobs.

Good points.

Some will think the government should increase the debt to help the poor. Does it really help the poor? Sooner or later, we must pay not only the debt, but the interest on it too. Sure we can tax the investors, but if they're abroad, how do we do that? In the end, a national debt simply enriches the rich even more.

And as for creating jobs, it's not up to the government to create jobs, but merely to maintain a balanced employment environment.

I'm not saying government should play no role in the economy, but its role should be through consultation and united action with labour, management, the private sector, charities, the international community, etc.

The world economy is like dominoes. If one is standing, they'll all stand. When one falls, they'll all fall. If we want it to succeed, we need to work with the international community foreign governments, the private sector, NGO's etc. It's not up to the government to act like a hero and come and try to save the day carrying the world's burden on its back.